Jury to hear case of alleged financial elder abuse: Gardener accused of taking advantage of late woman, blind son

SANTA CRUZ - Opening statements are expected to begin Tuesday in a jury trial to determine whether a gardener took advantage of a Santa Cruz woman in her 80s and her adult blind son.

Peter Reiter, 56, began working for Eva Krageness and her son James Krageness in late 2000 as their landscaper, according to records. In 2004, when Eva Krageness' lost her driver's license, Reiter began performing other caretaker duties, including grocery shopping and driving her and her son to various appointments.

According to documents filed in court, as the Kragenesses became more dependent upon Reiter, the amount of money he received from them increased drastically, from nearly $12,000 in 2003 to $173,000 the following year, for instance.

Eva Krageness died in 2006 and her son died in 2009. A relative of the pair and executor of James' estate, Sally Coubaugh, discovered the amount of money that had been paid to Reiter. She filed a civil suit alleging financial elder abuse and fraud.

At issue is whether the money Reiter received from the Kragenesses was given to him freely or wrongfully obtained.

Coubaugh's attorneys, James Farrar and Thomas Dwyer, said Eva Krageness and her son became increasingly isolated as they became more dependent on Reiter. Most of the people they relied on to handle their financial and other affairs were selected by Reiter.

In late 2005, a Comerica Bank supervisor contacted Santa Cruz County Adult Protective Services to report a case of possible financial abuse. The supervisor informed the agency that in June 2005, Eva Krageness had more than $200,000 in her bank, but between May and October 2005, checks ranging from $10,200 to $12,600 were made out every two weeks to Reiter. The supervisor also noted that in September 2005, a check for $10,000 bounced.

By the time of the referral to Adult Protective Services, Eva Krageness' bank account had dropped to $4,000. Adult Protective Services closed the case in November 2005, stating that "allegations of financial abuse are inconclusive at this time," noting that Eva Krageness had confirmed she was paying Reiter and that she felt it was a private matter. No criminal charges were ever filed.

Reiter's attorney, Richard Manning, argues that both Kragenesses were competent and able to manage their affairs, and that it was their generosity that led them to give Reiter large sums of money. The defense contends it wasn't a matter of Reiter having undue influence.

Farrar and Dwyer argue that, while it's undisputed that Reiter obtained several hundred thousand dollars from the Kragenesses, he "knew or should have known" that the depletion of that much cash was "likely to be harmful" to both Eva and James Krageness.